Markets were more quiet than usual during the Asian trading session as the Fed rate decision started to become the centre of attention, with traders scaling back bets.
The moves in the US dollar after the relatively soft CPI number from the US started to unravel, as the buck gave back most of its post CPI reaction gains.
Yet more news from China as the Government cut the retail prices of gasoline and diesel, effective today, Wednesday, 14 June 2023. This was the sixth cut (so far) this year.
Basically, Gasoline and diesel prices will be reduced by 55 yuan per tonne and 50 yuan per tonne. This was clearly a move in tow with recent action to help the consumed.
China’s state planner, the National Development and Reform Commission, cited the falling oil price as the reason, but as noted above, the economy is not good in China.
Under China’s current pricing mechanism, the prices of refined oil products are adjusted following changes in international crude oil prices. The NDRC forecast that the international market would continue the weak performance in the short term.
The NDRC added it has directed China’s three biggest oil companies, China National Petroleum Corporation, China Petrochemical Corporation and China National Offshore Oil Corporation.
Goldman Sachs also commented that “We view today’s report as supportive of our call for a pause at the June FOMC meeting followed by a hike in July.”
And they added that “We expect the Fed to deliver a hawkish pause tomorrow and to highlight the possibility of following a similar path to the Reserve Bank of Australia and the Bank of Canada, who both hiked after a pause.”
